Market Roundup
- USD/JPY -0.04%, EUR/USD +0.33%, GBP/USD +0.2%
- DXY -0.13%, DAX -0.4%, Brent +0.35%, Iron +0.7%, Gold +0.4%
- Germany Finmin no possibility of increased fiscal policy due to high debt levels
- ECB’s Merch- Not far from the point to say rates have bottomed out
- IT Renzi-not willing to seek deal with other parties if loses referendum
- UK Oct Retail Sales +7.4% y/y vs revised 4.2% previous, 5.3% expected
- EZ Oct Final Inflation 0.5% vs 0.5% previous, 0.5% expected
- FR Q3 ILO unemployment 10.0% vs 9.9% previous
- BoJ Gov Kuroda – Possible to raise or lower 10-year JGB yield target
- BoJ surprise move offers to buy unlimited JGBs 1-5 year at fixed prices
- PM adv Hamada – Japan needs fiscal stimulus including tax cuts – Nikkei
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Department of Commerce is likely to report that housing starts rose to 1.151 million-unit rate in October from 1.042 million-unit in September.
- (0830 ET/1230 GMT) The U.S. building permits are expected to have decreased to a 1.20 million unit pace in October from 1.225 million units in September.
- (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 3,000 to a seasonally adjusted 257,000 for the week ended Nov. 12 while continuing claims for the week ending Nov. 4 is expected to drop to 2.038 m from 2.041 m.
- (0830 ET/1330 GMT) The U.S. consumer price index likely increased 0.4 percent in October after rising 0.3 percent in September, while in the 12 months through October, the CPI is expected to have risen 1.6 percent. Excluding food and energy, the core CPI probably rose 0.2 percent after increasing 0.1 percent in September.
- (0830 ET/1330 GMT) Philadelphia Federal Reserve manufacturing survey is likely to show that business activity decreased to 8.0 in November from 9.7 in October.
- (0830 ET/1230 GMT) Statistics Canada will report foreign portfolio investment in domestic stocks for the month of September.
- (0830 ET/1230 GMT) The Statistics Canada will release investment in foreign securities figures for the month of September.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending November 11.
- (1645 ET/2145 GMT) The Statistics New Zealand will report its producer price index input and output data for the third quarter. PPI input rose 0.9 percent and output increased 0.2 percent during the second quarter.
Key Events Ahead
- (0800 ET/1300 GMT) Federal Reserve Bank of New York president William Dudley and Board of Governors of the Federal Reserve System member Lael Brainard will speak at a forum titled "The Evolution of Work."
- (1000 ET/1500 GMT) Federal Reserve Chair Janet Yellen testifies on the economic outlook before the congressional Joint Economic Committee in Washington.
- (1145 ET/1645 GMT) FedTrade 30-year Fannie Mae/Freddie Mac max $2.500 bln
- (1645 ET/2145 GMT) European Central Bank Executive Board member Peter Praet's speech.
FX Beat
DXY: The dollar eased across the board as markets nervously awaited Federal Reserve Chair Janet Yellen testimony before the congressional Joint Economic Committee. The greenback against a basket of currencies traded 0.25 percent lower at 100.04, but within the sight of a 13-1/2 year high of 100.57 hit in the previous session. FxWirePro's Hourly Dollar Strength Index stood at 58.88 (Bias Neutral) by 1100 GMT.
EUR/USD: The euro gained, after declining for eight straight days as the dollar edged lower across the board on speculations that the Federal Reserve chief Janet Yellen will express concern over the pace of greenback's surge to a 13-1/2-year high and rise in bond yields. Moreover, the major was also supported by Eurozone's mixed consumer price index, which rose 0.2 percent in October, missing estimates of 0.3 percent, however, on an annualized basis it remained unchanged at 0.5 percent. The European currency traded 0.4 percent up at 1.0730, hovering away from a low of 1.0666 struck on Wednesday, its lowest level since December 3. FxWirePro's Hourly Euro Strength Index stood at -6.60 (Bias Neutral) by 01100 GMT. The major support is around 1.0630 (161.8% retracement of 1.09115 and 1.13663) and any break below confirms further weakness, a decline till 1.0600/1.0560/1.0520 is possible. On the higher side, any break above 1.0780 (5- day MA) will take the pair till 1.0820/1.08500 in the short term.
USD/JPY: The dollar initially declined to an intra-day low of 108.55, however, it regained some momentum to trade above the 109.00 handle after Bank of Japan conducted its first special operation to curb rising yields on Japanese government bonds. Investors’ attention now remains on Fed Chair Janet Yellen's testimony to the congressional Joint Economic Committee, where she is expected to express concern about the dollar's rapid gains and the tightening of conditions through higher bond yields. The major trades 0.1 percent lower at 108.98, having hit a peak of 109.75 on Wednesday, it’s strongest since Jun. 1. FxWirePro's Hourly Yen Strength Index stood at -58.64 (Bias Neutral) by 1100 GMT. The major resistance is around 110 and break above targets 111.80. On the lower side, minor support is around 108 (5- day MA) and any break below targets 107.48 (7- day EMA).
GBP/USD: Sterling rose above the 1.2500 handle on the back of better-than-expected retail sales data, which indicated robust sentiments among the British consumers. Britain's retail sales rose 1.9 percent in October, beating estimates of 0.4 percent, while on an annualized basis it jumped 7.4 percent, versus a consensus of 5.3 percent and previous 4.2 percent, recording its highest in more than 14 years. Sterling trades 0.25 percent higher at 1.2472, having hit an intra-day high of 1.2504. FxWirePro's Hourly Sterling Strength Index stood at 15.25 (Bias Neutral) by 1000 GMT. The pair should break below 1.2378 (Kijun-Sen) for further weakness, a decline till 1.23500/1.2300 is possible. On the higher side, any break above 1.2530 will take the cable to next level till 1.2600/1.2675. Against the euro, the pound trades 0.1 percent lower at 85.97 pence, after rising as high as 85.76 following the data release.
USD/CHF: The Swiss franc edged up after declining seven consecutive days, as markets turned cautious ahead of Federal Reserve Chair Janet Yellen testimony. The dollar trades 0.1 percent lower at 1.0004, attempting to sustain gains above the 1.0000 handle. On Wednesday, the major rose as high as 1.0058, hitting its strongest level since Mar. 10, as increasing prospects of U.S. interest rate hike in December boosted the sentiments around the greenback. FxWirePro's Hourly Swiss Franc Strength Index stood at -78.44 (Bias Slightly Bearish) by 1000 GMT. The short-term trend is bullish as long as support 0.9945 (7- day EMA) holds and any violation below confirms minor weakness, a decline till 0.9860/0.9780 is possible. On the higher side, resistance stands at 1.0095 and any indicative close above targets 1.0180
AUD/USD: The Australian dollar declined, extending losses from the previous session as fresh buying interest in the greenback weakened the sentiment around the Aussie. The major came under renewed selling pressure as markets ignored stable Australian unemployment rate in October and focused on the lower-than-expected number of employed people during the same period. The pair trades 0.1 percent lower at 0.7468, having touched a fresh 1-month low of 0.7459 and has lost more than 3.5 percent since Nov. 8. FxWirePro's Hourly Aussie Strength Index stood at -140.42 (Bias Highly Bearish) by 1000 GMT. On the higher side, minor resistance is around 0.7530 and any break above will take it till 0.7580/0.7650/0.7680. The major support is around 0.7450 and break below will drag it till 0.7400/0.7360.
NZD/USD: The New Zealand dollar gained, halting a 6-day losing streak after ANZ Bank survey posted an upbeat assessment of the economy's labor market. The major rose above the 0.7100 handle, however, failed to sustain gains as increasing bets for an eventual Fed rate hike action in December and continuous slide in commodity prices, undermined the bid tone around the Kiwi. The pair trades 0.4 percent higher at 0.7097, pulling away from a low of 0.7035 hit in the previous session, it’s weakest since Oct. 13. FxWirePro's Hourly Kiwi Strength Index was Neutral at -10.32 by 0500 GMT. Immediate resistance is located at 0.7130, a break above targets 0.7180. On the downside, support is seen at 0.7050, a break below could drag it near 0.7030/ 0.7000.
Equities Recap
European shares gained, reversing early session losses, as the dollar took a breather from a post-U.S. election surge that had boosted it to a 13-1/2 year high.
The pan-European STOXX 600 index increased 0.18 percent at 339.09 points, while the FTSEurofirst 300 index added 0.08 percent at 1,337.60 points.
Britain's FTSE 100 trades 0.3 percent up at 6,770.62 points, while mid-cap FTSE 250 soared 0.57 percent at 17,573.99 points.
Germany's DAX tumbled 0.25 percent at 10,637.71 points; France's CAC 40 trades 0.03 percent lower at 4,499.61 points.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent but was still down 1 percent on the week.
Tokyo's Nikkei rose to 17,862.63 points, Australia's S&P/ASX 200 index nudged up 0.03 percent to 5,329.20 points and South Korea's KOSPI gained 0.05 percent at 1,980.55 points.
Shanghai composite index edged up 0.1 percent to 3,208.45 points, while CSI300 index added 0.2 percent at 3,436.54 points. Hong Kong’s Hang Seng shed 0.1 percent at 22,262.88 points.
Commodities Recap
Crude oil rose, reversing most of the previous session losses after Venezuelan President Nicolas Maduro stated that OPEC countries are set to reach a forceful agreement on cutting oil output, following a meeting with OPEC Secretary-General Mohammed Barkindo. Global benchmark Brent crude was trading 0.9 percent higher at $46.77 per barrel by 0939 GMT, hovering towards a high of $47.53 hit in the previous session, its highest since Nov. 2. U.S. West Texas Intermediate crude rose 0.95 percent at $45.74 a barrel, inching closer to a 2-week high of $46.38 struck on Wednesday.
Gold prices gained as a rally in the U.S. dollar halted after hitting a 13 1/2-year high, while markets cautiously awaited Federal Reserve Chair Janet Yellen testimony. Spot gold was up 0.25 percent at $1,227.44 an ounce at 0944 GMT, reversing previous session's 0.25 percent drop. U.S. gold futures rose 0.33 percent to $1,228.00 an ounce.
Treasuries Recap
The United States benchmark 10-year Treasury yield tumbled 2-1/2 basis points to 2.200 percent as investors wary ahead of October consumer inflation data and the testimony from the Federal Reserve Chair Janet Yellen.
The UK gilts traded nearly flat Thursday, succumbing to thin trading activity as investors await the Federal Reserve Chair Janet Yellen testimony, in an attempt to estimate the Fed's most likely policy step. The yield on the benchmark 10-year gilts hovered around 1.38 percent, the super-long 30-year bond yield remained steady at 2 percent and the yield on short-term 2-year climbed 1/2 basis point to 0.195 percent.
The German bunds gained after the Bank of Japan surprisingly announced its first special bond-buying operation to curb growth in bond yields. The yield on the benchmark 10-year bond fell 3 basis points to 0.277 percent, the yield on long-term 30-year note dipped 3-1/2 basis points to 0.880 percent and the yield on short-term 3-year bond slid 1 basis point to -0.636 percent.
The Japanese government bonds gained after the Bank of Japan announced its first special bond-buying operation to control Treasury yields. The benchmark 10-year bond yield fell 1/2 basis point to 0.019 percent, the yield on long-term 30-year note slid 1 basis point to 0.560 percent and the yield on short-term 2-year note dipped 4 basis points to -0.148 percent.
The New Zealand government bonds closed higher as investors poured into safe-haven instruments amid losses in riskier assets including equities and crude oil. Also, an economy is still reeling from the impact of powerful Monday’s earthquakes. The yield on the benchmark 10-year bond fell 10 basis points to 3 percent, the yield on 7-year note ended nearly 9 basis points lower at 2.673 percent and the yield on short-term 2-year note slid 7-1/2 basis points to 2.060 percent.
The Australian government bonds gained as investors remained cautious ahead of the United States consumer inflation data and Federal Reserve Chair Janet Yellen’s testimony, in an attempt to estimate the Fed's most likely policy step. The yield on the benchmark 10-year Treasury note fell 6 basis points to 2.59 percent, the yield on 15-year note dipped 5 basis points to 3.012 percent and the yield on short-term 2-year slid 5 basis points to 1.77 percent.
